While the Federal Deposit Insurance Corp. (FDIC) doesn't reveal the identities of banks listed on its "Problem List" of institutions -- ones that the FDIC determines pose a greater risk of loss to its deposit insurance fund -- there is nothing stopping the problem banks' parent companies from identifying themselves.
In a study of annual reports filed by bank holding companies in the first quarter of this year, CoStar Group found 15 firms that reported there were substantial doubts about their abilities to continue as going concerns.
Top among the reasons cited by the banks for issuing the warning to their investors was eroding capital positions and the inability to raise additional capital. Most of the companies also indicated that they or their banks were operating under formal written agreements with federal bank regulators to boost capital.
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The 15 holding companies controlled 30 banks with total combined assets of $9 billion at year-end. Almost 38% of those assets were tied to
commercial real estate loans. Seventeen of the banks reported that from more than half to as much as 84% of their lending activity was CRE related. Two banks on the list were based in Nevada; Bank of Las Vegas, which reported that 84% of its total loans went for commercial real estate; and 1st Commerce Bank in North Las Vegas, which reported that 83% of its loans were CRE related.
The 30 banks together reported holding more than $700 million in seriously delinquent CRE loans and foreclosed commercial properties on their books at year-end 2011. Michigan Commerce Bank in Ann Arbor reported the highest total with $98.5 million. It also reported the highest CRE loan total with $413 million.
By percentages, the two Nevada based banks reported the highest ratio of distressed CRE assets to total assets; 24% for 1st Commerce Bank and 23% for Bank of Las Vegas.
Two banks in the group of 30 reported total assets of more than $1 billion at year-end: First Mariner Bank in Baltimore, MD, ($1.18 billion) and FSGBank in Chattanooga, TN, ($1.11 billion.).
The four-state area of George, Tennessee, North and South Carolina accounted for 11 of the banks with $4.3 billion of the total assets.
Five of the banks were based in Michigan and had combined total assets of $1.43 billion.
One bank holding company, Capitol Bancorp Ltd. in Lansing, MI, controlled 16 of the banks on the list with total combined assets of $2.25 billion. In many ways, its situation as reported in its annual report is indicative of all the reporting institutions that listed doubts about their ability to continue as going concerns in today's economy.
Capitol Bancorp reported that it had experienced a significant deterioration in asset quality and incurred significant operating losses. The resulting equity deficit prompted regulators to classify the bank as less than "adequately-capitalized" and placed Capitol and most of its banking subsidiaries under increased regulatory oversight and additional compliance requirements that raised doubts regarding Capitol's ability to continue as a going concern. Capitol incurred net losses of $45.4 million and $225.2 million during the years ended Dec. 31, 2011, and 2010, respectively.
The bank said its losses have largely resulted from provisions for loan losses and impairment losses related to goodwill and other real estate owned. Since Jan. 1, 2008, Capitol has recorded total provisions for loan losses of $419.1 million (excluding discontinued operations).
As of Dec. 31, 2011, approximately 99% of Capitol's bank loan portfolio consisted of loans secured by real estate and commercial loans secured by business assets other than real estate. Those consolidated subsidiaries' types of loans are typically larger than other loans that made up the remaining portion of Capitol's and its banking subsidiaries' portfolio loans.
Capitol Bancorp, like most of the other reporting institutions, has commenced several initiatives and other actions to improve their financial condition. And while they could not give investors assurances that the strategies would avert further losses, it should be noted that, the fact the institutions have reported doubts about their going concern does not mean that they were in imminent danger of being seized by banking regulators or that the institutions would not be successful in their efforts.
The Banks & Their Troubled Holding Companies
| Bank | City, State | Total Assets | Total CRE Loans | Total Del./Distressed CRE Assets | Public Holding Company
| Mountain 1st Bank & Trust Co. | Hendersonville, NC | $700,025 | $252,018 | $34,261 | 1st Financial Services Corp
| | American Patriot Bank | Greeneville, TN | $94,194 | $21,708 | $10,667 | American Patriot Financial Group Inc.
| | Bank of the Carolinas | Mocksville, NC | $485,766 | $158,588 | $16,908 | Bank of the Carolinas Corp.
| | Broadway Federal Bank | Los Angeles, CA | $418,357 | $271,255 | $52,743 | Broadway Financial Corp.
| | Michigan Commerce Bank | Ann Arbor, MI | $776,983 | $413,136 | $98,493 | Capitol Bancorp Ltd.
| | Bank of Las Vegas | Henderson, NV | $318,174 | $202,183 | $72,783 | Capitol Bancorp Ltd.
| | Sunrise Bank of Arizona | Phoenix, AZ | $303,609 | $182,691 | $35,480 | Capitol Bancorp Ltd.
| | Capitol National Bank | Lansing, MI | $153,938 | $74,804 | $7,515 | Capitol Bancorp Ltd.
| | Indiana Community Bank | Goshen, IN | $119,383 | $44,582 | $5,368 | Capitol Bancorp Ltd.
| | Bank of Michigan | Farmington Hills, MI | $85,685 | $52,722 | $2,747 | Capitol Bancorp Ltd.
| | First Carolina State Bank | Rocky Mount, NC | $85,169 | $27,288 | $6,784 | Capitol Bancorp Ltd.
| | Sunrise Bank | Valdosta, GA | $81,125 | $32,562 | $13,234 | Capitol Bancorp Ltd.
| | Sunrise Bank of Albuquerque | Albuquerque, NM | $60,138 | $32,445 | $6,453 | Capitol Bancorp Ltd.
| | Mountain View Bank of Commerce | Westminster, CO | $51,666 | $31,807 | $1,009 | Capitol Bancorp Ltd.
| | Summit Bank of Kansas City | Lees Summit, MO | $49,696 | $13,557 | $560 | Capitol Bancorp Ltd.
| | Central Arizona Bank | Scottsdale, AZ | $41,976 | $22,088 | $5,153 | Capitol Bancorp Ltd.
| | Bank of Maumee | Maumee, OH | $33,495 | $2,024 | $695 | Capitol Bancorp Ltd.
| | High Desert Bank | Bend, OR | $31,020 | $16,630 | $104 | Capitol Bancorp Ltd.
| | Pisgah Community Bank | Asheville, NC | $28,120 | $15,199 | $5,566 | Capitol Bancorp Ltd.
| | 1st Commerce Bank | North Las Vegas, NV | $26,375 | $15,401 | $6,218 | Capitol Bancorp Ltd.
| | CFBank | Fairlawn, OH | $249,775 | $32,525 | $8,511 | Central Federal Corp.
| | Community Bank-Wheaton/Glen Ellyn | Glen Ellyn, IL | $335,546 | $98,886 | $13,278 | Community Financial Shares Inc.
| | Community Shores Bank | Muskegon, MI | $208,623 | $75,328 | $8,635 | Community Shores Bank Corp.
| | First Mariner Bank | Baltimore, MD | $1,179,394 | $393,609 | $70,058 | First Mariner Bancorp
| | FSGBank | Chattanooga, TN | $1,111,820 | $270,808 | $53,359 | First Security Group Inc.
| | Horry County State Bank | Loris, SC | $537,941 | $190,209 | $47,810 | HCSB Financial Corp.
| | Monarch Community Bank | Coldwater, MI | $207,740 | $53,876 | $6,961 | Monarch Community Bancorp Inc.
| | Mountain National Bank | Sevierville, TN | $509,271 | $189,042 | $42,727 | Mountain National Bancshares Inc.
| | The Citizens Bank of East Tennessee | Rogersville, TN | $128,027 | $34,686 | $13,525 | Volunteer Bancorp Inc.
| | Waccamaw Bank | Whiteville, NC | $562,002 | $149,460 | $52,722 | Waccamaw Bankshares Inc. | |
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